Where Did Promotions Go?

The manager thought that this year was definitely the year: She had brought in big earnings for the company, and closed an unexpected deal. So she trotted into her boss’s office and made her case for a promotion in the New Year.

Experts say that she should prepare to be woefully disappointed: Promotions will be few and far between this year. Just one in ten employees are getting promoted, which is down 23% from 2022. This, says Tom McMullen, leader of Korn Ferry’s North America Rewards practice, will likely lead to some workers departing. “There is a very real risk here,” he says. Indeed, a lack of upward trajectory is a top-three factor in employee retention and engagement, according to the Korn Ferry Global Employee Opinion database, which tracks 6.8 million employees at over 500 firms.

To be sure, firms struggle with promotions. “There’s always the potential for sour grapes,” says engagement expert Mark Royal, senior client partner at Korn Ferry, because supply usually runs short of demand. But these days promotions are truly becoming a rarity among higher-ranking employees: They tend to heavily skew toward early-career employees, creating prolonged waits for senior, managerial, and executive workers.

This year, promotions are down, in part, because firms are adopting flatter management structures—which inherently have fewer slots for promotion. The slower job market of the past year has led employees to stay put, meaning that new spots aren’t opening up. Meanwhile, employee costs have continued to rise, while company profits have not. “Firms are looking long and hard at cutting and consolidating jobs,” says retail expert Craig Rowley, senior client partner at Korn Ferry.

Some see the scarcity of promotions as an unintended consequence of employees pushing for other perks, such as improved benefits packages and more days off. Most companies budget for employees’ total rewards, which include compensation and benefits. “There’s an intersection of the streets of affordability and talent strategy,” says Ron Seifert, leader of the North America Workforce Reward and Benefits practice at Korn Ferry. “Ideally, there’s some kind of stop sign to minimize incidents.”

Only about half of employees feel that their firms handle promotions fairly, according to the Korn Ferry Global Employee Opinion survey. The situation can unravel quickly for the employer when employees begin to look elsewhere and go through the process of articulating why. “Being asked in an interview why you want to leave tends to crystallize it,” says business psychologist James Bywater, senior client partner at Korn Ferry.

Experts advise managers to offer alternate career-advancement avenues. For example, if promotion is not possible, a manager might connect employees with training and development opportunities, as well as brief them on where their futures lie in the company. “You want people feeling pretty confident that they can reach their objectives within the organization,” says Royal.

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